Frank Forte was the kind of kid who was already fascinated by Wall Street by the time he was about 15. He was a whiz at math, and rather precociously, he also loved reading about options, derivatives and the market. But even back then commercial real estate was on his radar, too. After a few well-timed twists and turns early in his career, he made his path into real estate investment.
Ten years ago, he co-founded a private equity investment firm that he named Lucern Capital Partners, which he runs with David Hansel, the firm's co-founder and managing partner. Since then, he’s been involved in transactions valued at more than $380 million across a wide swath of the East Coast.
Lately he’s been finding attractive opportunities in the burgeoning small-bay industrial market at a time when he believes the larger industrial sector has become overbuilt. Forte discusses the economic climate that's impacting the decision-making of his customers and prospects. He talks about the bid-ask gap and his strategy for underwriting potential deals.
In our conversation, my guest addresses what it takes to build a successful commercial real estate investment business and offers caveats about the traps that new participants can fall into. He emphasizes the importance of taking a clear-eyed view of market opportunities.
And he cautions against buying into the myth that commercial real estate is some kind of get-rich-quick scheme. He told me that "what people don't see is (that) to really generate the value, you need to roll up your sleeves, and you need to be a good operator.”
Yet for all the hard work that success demands, Forte doesn’t think of it as being a grind. As he puts it: “I feel like I never work a day in my life, so I'm very lucky.” Take a listen.
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Episode highlights:
(1:47) Launching a new investment platform
(4:28) What’s in a company name
(7:06) Career origins, from Wall Street dreams to private equity success
(11:05) Finding big opportunities in small-bay
(16:02) Lucern’s geographic sweet spot
(17:29) Caveats for new investors: play the long game
(19:30) The keys to operational excellence
(23:48) Navigating capital market complexities
(26:16) How volatility is impacting leasing velocity
(29:46) Inside the bid-ask gap
(32:28) Underwriting in an unsettled market
(34:01) Plan for powering through ’27 and ’28
(36:32) Executive off the clock: it’s a shore thing
